Benefits of Trading the Purchase Order (850) via EDI

PurposeThe primary purpose of the Purchase Order (EDI850/EDI875) is used by the buyer to request goods and/or services from a supplier. There are two documents that support the Purchase Order. The 850 is more widely used in General Merchandise while the 875 is Grocery focused.

The key data elements included in a Purchase Order are:

Purchase Order number

Purchase Order date

Location(s) where the product or services should

be supplied to

Requested ship and/or delivery date

Product Item Identifiers/Services such as

UPC/EAN/GTIN needed with their respective quantities

Additional data that may also be included in the Purchase Order are:

Carrier and service levels

Vendor Number

Item price

Expected charges and/or allowances

Additional item identifiers such as Buyer Item Number and Vendor Part Number

Item Description

Additional dates (Ex: Cancel by dates)

BenefitsThere are benefits to both the purchaser and the supplier of implementing electronic trading of the purchase order. Many of these are dependent on how automated and integrated the transaction is for both parties. Some of the benefits that can be realized include:

Reduction in volume of paper flow and gain operating efficiencies through reduced time requirements to complete transactions by both parties

Reduction in administrative time spent manually submitting orders (buyer) and manually receiving and entering purchase orders (supplier) allowing for resources to focus on value added work

Elimination of data entry errors associated with manual processes

Potentially increases the speed of fulfillment and supports the ability for the retailer to lower their on hand inventory